I am intrenched at the Olustee to-night and have about 1,800 infantry, 450 cavalry, and two batteries, and one section of artillery. It is hardly prudent to move forward against so large a cavalry force, who can operate by forced marches in the night on my line of communication and perhaps cut me off from Middle Florida, by making a detour through the country and a sudden descent on the bridge over the Suwannee, at Columbus, where I have but 30 men.

I have no doubt that the commanding general appreciates the situation of affairs in this district and will make such provision for its defense as the means at his command will allow. It is evident, however, that with the large and well-appointed force of the enemy, piloted by traitors familiar with every portion of the country, and knowing the position and strength of my command, the whole district will be ruined unless timely re-enforcements are sent forward. General Seymour is said to be in command of the abolition expedition.

I will act cautiously until the plans of the enemy are more fully developed. Their cavalry and artillery are at this time at Sanderson, some 10 miles from Olustee, and their infantry about 5 miles in their rear. They give me credit for a much larger force than I have. At Lake City they skirmished heavily with my forces for several hours till they discovered my works and artillery, when they withdrew and retreated to Sanderson. I was not, of course, in a position to follow.

I am, general, very respectfully, your obedient servant,

JOSEPH FINEGAN,

Brigadier-General, Commanding.

Brigadier General THOMAS JORDAN,

Chief of Staff.

[Indorsement.]

HDQRS. DEPT. OF S. CAROLINA, GEORGIA, AND FLORIDA,
Charleston, S. C., February 21, 1864.

Respectfully forwarded, for the information of the War Department.

All available troops have been dispatched from Georgia, Middle Florida, and South Carolina to the assistance of Brigadier-General Finegan, in view of the importance of the resources of that section and of the apparent opportunity of striking the enemy an effective blow. There will soon be concentrated there about 8,000 men of all arms of the service, including at least 1,800 cavalry. Brigadier-General Taliaferro has been sent to assume command for the present and organize the troops into three brigades of infantry, with the cavalry and infantry embodied, respectively under proper officers.

Brigadier-General Gardner, I have just learned by telegraph, has repaired to Lake City from Middle Florida, and I have directed him to assume command until the arrival of Brigadier-General Taliaferro, who has my verbal and written instructions as to line of operations. Had I been confident of Brigadier-General Gardner's physical ability for the field (an active command) as I have great confidence in his soldierly qualities, I should have ordered him to the spot at once, but he had but recently been in Augusta for a surgical operation, and I feared he was unequal physically to the place.